Edexcel B · Theme 1: Markets, consumers and firms · 1.5 Market failure and government intervention

Edexcel B Economics past paper questions: Market failure and government intervention

Every Edexcel B question on Market failure and government intervention from 2016 to 2025: 8 essays, 17 data response questions and 7 short answer questions. It covers Revenue, costs, profits and cash, Market failure across the economy, Competition and market power, Introducing the market and Risk and the financial sector. Each question links to its paper, mark scheme and examiner report.

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SubtopicsRevenue, costs, profits and cash 9Market failure across the economy 8Competition and market power 3Introducing the market 1Risk and the financial sector 1

Essay questions on market failure and government intervention

A-level Paper 1, June 2025, Q3Evaluate20 marks

Case study: Costs and benefits for nuclear power stations

Evaluate whether the social benefits of building nuclear power stations outweigh the social costs.

Question paper p.18 Mark scheme p.18 Examiner report p.55 Open in the tool Practise the negative externality diagram

A-level Paper 1, June 2024, Q2Evaluate20 marks

Case study: Sugar tax and childhood obesity

Evaluate the effectiveness of indirect taxation on demerit goods to reduce childhood obesity in the UK.

Question paper p.19 Mark scheme p.16 Examiner report p.32 Open in the tool Practise the indirect tax diagram Practise the negative externality diagram

A-level Paper 3, June 2023, Q2(d)Evaluate20 marks

Case study: Indian Oil Corporation (IOC) enters niche segment with Bikers Cafe

Evaluate government policies that can be used to deal with market failure in an economy caused by emissions.

Question paper p.20 Mark scheme p.19 Examiner report p.36 Open in the tool Practise the negative externality diagram

A-level Paper 1, June 2022, Q2Evaluate20 marks

Case study: UK Consumer Price Index (CPI) inflation rate (%) June 2020 – May 2021

Evaluate the effectiveness of using monetary policy to control inflation in the UK.

Question paper p.22 Mark scheme p.15 Examiner report p.26 Open in the tool Practise the AD/AS diagram

A-level Paper 1, November 2020, Q2Evaluate20 marks

Case study: Manchester

Evaluate the extent to which these externalities are likely to benefit the UK economy.

Question paper p.18 Mark scheme p.15 Examiner report p.13 Open in the tool

AS Paper 1, November 2020, Q3Evaluate20 marks

Case study: Food Standards Agency labelling on foods

Evaluate the extent to which food labelling regulations could be considered a government failure.

Question paper p.19 Mark scheme p.16 Open in the tool

A-level Paper 1, June 2019, Q3Evaluate20 marks

Case study: The cost of going to university

The UK government intervenes in the education sector. Education is considered a merit good. Evaluate the likely impact on the UK economy of government intervention in the education sector.

Question paper p.26 Mark scheme p.17 Examiner report p.21 Open in the tool Practise the positive externality diagram

A-level Paper 3, June 2017, Q1(d)Evaluate20 marks

Case study: McKinsey: Obesity costs UK society £51bn per year

Evaluate the argument that market failure can be solved by government intervention.

Question paper p.11 Mark scheme p.10 Examiner report p.12 Open in the tool

Data response questions on market failure and government intervention

A-level Paper 1, June 2025, Q1(d)Analyse6 marks

Case study: The UK rail industry

Analyse two possible reasons why the UK Government subsidises rail travel.

Question paper p.5 Mark scheme p.7 Examiner report p.17 Open in the tool

A-level Paper 3, June 2023, Q2(c)Assess12 marks

Case study: Indian Oil Corporation (IOC) enters niche segment with Bikers Cafe

Using a suitable diagram, assess the benefits of a subsidy in a market such as the French energy market.

Question paper p.18 Mark scheme p.17 Examiner report p.31 Open in the tool Draw it: subsidy diagram

A-level Paper 1, June 2022, Q1(d)Analyse6 marks

Case study: UK market share figures (%) for car manufacturers in 2020

Using a suitable diagram, analyse the likely impact on the market for new petrol and diesel cars if the government increases the subsidy on new electric cars.

Question paper p.9 Mark scheme p.6 Examiner report p.9 Open in the tool Draw it: supply and demand diagram Or: subsidy diagram

A-level Paper 1, June 2022, Q1(e)Discuss8 marks

Case study: UK market share figures (%) for car manufacturers in 2020

Discuss the likely impact on UK car exports following a depreciation of the pound against the euro.

Question paper p.11 Mark scheme p.7 Examiner report p.12 Open in the tool

A-level Paper 1, June 2022, Q1(f)Assess10 marks

Case study: UK market share figures (%) for car manufacturers in 2020

Assess the likely benefits for Stellantis of selling a range of different car brands.

Question paper p.13 Mark scheme p.9 Examiner report p.15 Open in the tool

A-level Paper 1, June 2022, Q1(g)Assess12 marks

Case study: UK market share figures (%) for car manufacturers in 2020

Assess the benefits to the UK economy of subsidising the Vauxhall car plant in Ellesmere Port.

Question paper p.15 Mark scheme p.11 Examiner report p.19 Open in the tool Practise the subsidy diagram

A-level Paper 1, June 2022, Q1(h)Assess12 marks

Case study: UK market share figures (%) for car manufacturers in 2020

Assess the likely impact on the UK economy of the Government banning the sale of new petrol and diesel cars from 2030.

Question paper p.17 Mark scheme p.13 Examiner report p.22 Open in the tool

A-level Paper 1, November 2020, Q1(f)Assess10 marks

Case study: How British Airways (BA) is turning itself into a low-cost airline

Assess the government’s decision to reduce air passenger duty (APD) as part of its vision for UK aviation.

Question paper p.10 Mark scheme p.9 Examiner report p.7 Open in the tool Practise the indirect tax diagram Practise the negative externality diagram

A-level Paper 1, November 2020, Q1(g)Assess12 marks

Case study: How British Airways (BA) is turning itself into a low-cost airline

Assess the possible impact of rising fuel prices on an airline business.

Question paper p.12 Mark scheme p.11 Examiner report p.9 Open in the tool

A-level Paper 1, November 2020, Q1(h)Assess12 marks

Case study: How British Airways (BA) is turning itself into a low-cost airline

Assess the extent to which this may negatively impact BA.

Question paper p.14 Mark scheme p.13 Examiner report p.11 Open in the tool

AS Paper 1, June 2019, Q1(d)Discuss8 marks

Case study: Float-ology: Ultimate relaxation at The Sanctuary

Using Extracts A and B, discuss whether the decision to open The Sanctuary for long hours was based on financial reasons.

Question paper p.5 Mark scheme p.6 Examiner report p.4 Open in the tool

AS Paper 1, June 2019, Q1(e)Assess12 marks

Case study: Float-ology: Ultimate relaxation at The Sanctuary

Assess the potential benefits for The Sanctuary of purchasing a second pod.

Question paper p.7 Mark scheme p.8 Examiner report p.4 Open in the tool

AS Paper 1, June 2019, Q2(d)Discuss8 marks

Case study: House prices rise at fastest rate since January, says Halifax bank

Using the data in Extracts D and E, discuss the merits of this type of government intervention in dealing with market failure in the housing market.

Question paper p.13 Mark scheme p.12 Examiner report p.5 Open in the tool

A-level Paper 3, June 2017, Q1(c)Assess12 marks

Case study: McKinsey: Obesity costs UK society £51bn per year

Using suitable diagrams, assess the likely success of a sugar tax in reducing obesity in the UK.

Question paper p.9 Mark scheme p.8 Insert Examiner report p.9 Open in the tool Draw it: indirect tax diagram Or: PED and PES diagram

AS Paper 1, June 2017, Q1(d)Discuss8 marks

Case study: Mountain Warehouse Profits Climb

Discuss whether Mountain Warehouse has a competitive advantage.

Question paper p.5 Mark scheme p.6 Examiner report p.7 Open in the tool

AS Paper 1, June 2017, Q1(e)Assess12 marks

Case study: Mountain Warehouse Profits Climb

Assess whether profit maximisation is the main objective for Mountain Warehouse.

Question paper p.6 Mark scheme p.8 Examiner report p.7 Open in the tool Practise the monopoly diagram

AS Paper 1, June 2016, Q2(e)Assess12 marks

Case study: MPs pass legislation to introduce standardised cigarette packaging

The external costs of smoking can cause market failure. Assess whether a smoking ban in playgrounds is the most effective method to correct this form of market failure.

Question paper p.15 Mark scheme p.13 Examiner report p.18 Open in the tool Practise the negative externality diagram

Short answer questions on market failure and government intervention

Case study: The UK rail industry

Using Extract B, calculate to two decimal places, the percentage of total income for the rail industry that came from government subsidies between April 2023 and March 2024. You are advised to show your working.

Question paper p.4 Mark scheme p.6 Examiner report p.13 Open in the tool

A-level Paper 1, June 2022, Q1(b)Explain4 marks

Case study: UK market share figures (%) for car manufacturers in 2020

Explain one reason why there is less likely to be price competition in the car industry.

Question paper p.7 Mark scheme p.5 Examiner report p.5 Open in the tool

Case study: UK market share figures (%) for car manufacturers in 2020

Using Extract B, calculate to two decimal places the profit for the year margin for Stellantis in 2020. You are advised to show your working.

Question paper p.8 Mark scheme p.5 Examiner report p.8 Open in the tool

A-level Paper 1, June 2018, Q1(b)Explain4 marks

Case study: The gourmet confectionery brand launched by Made in Chelsea star Jamie Laing

Explain one external cost caused by the consumption of sweets.

Question paper p.6 Mark scheme p.4 Examiner report p.5 Open in the tool

AS Paper 1, June 2017, Q1(b)Calculate4 marks

Case study: Mountain Warehouse Profits Climb

Calculate, to 2 decimal places, the profit for the year margin for Mountain Warehouse in 2014. You are advised to show your working.

Question paper p.3 Mark scheme p.4 Examiner report p.5 Open in the tool

Case study: Mountain Warehouse Profits Climb

Explain one possible reason why Mountain Warehouse’s profits increased by a higher percentage than the increase in sales.

Question paper p.4 Mark scheme p.5 Examiner report p.6 Open in the tool

AS Paper 1, June 2016, Q2(a)Define2 marks

Case study: MPs pass legislation to introduce standardised cigarette packaging

What is meant by the term ‘social costs’?

Question paper p.12 Mark scheme p.10 Examiner report p.12 Open in the tool

Question text is quoted from the question papers, © Pearson Edexcel, for students’ private study. Open the official papers and mark schemes from the links on each question. Examiner insights are written with AI assistance and moderated by Finn.

Essay questions on market failure and government intervention

Data response questions on market failure and government intervention

Short answer questions on market failure and government intervention

More Edexcel B topics: Markets, consumers and firms